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Output and imports change

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Reference no: EM131053873

Suppose that a country's imports are given IM=20+.1Y, and their consumption is given by C=100+.8Y. If the government increases government spending by 300, by how much will output and imports change?

My work:

Government multiplier= 1/(1-.8+.1)=10

How is the answer, outputs rise by 1000 and imports rise by 100?

Reference no: EM131053873

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